Why Today’s Housing Market is Different

The housing market is a difficult creature. Wrangling is going to require more than casual learning. A demand that is constantly in flux means that you need to be familiar with what the circumstances are in the immediate, current moment.

Low Supply

At the most basic level, home prices relate most directly to the supply and demand of properties. A higher market than supply generally will mean higher prices, whereas a higher supply than demand will mean lower prices. Right now – generally speaking, on a nationwide level – we find ourselves with a lower supply of properties. 

You may have difficulties locating a property that is in a good area and for a good price in most cities. This isn’t made any easier by real estate investors looking to make extra money by constructing multiple Airbnbs or rental properties in thriving areas.

More Investors

As a matter of fact, real estate investing has quickly become one of the most popular forms of investing money. That’s likely because it’s a relatively safe form of investment that promises handsome returns as long as you can find a tenant. It’s also due to the increasingly popular habit of young adults renting for longer and longer in life, as well as the aforementioned company Airbnb becoming just as much of a standard practice as a hotel. 

While they can make the buyer’s market difficult, sales involving investors can be advantageous – selling your home to an investor lets you pick a closer closing date, for example. Certain cities will be hotbeds for investors while other areas will be much less busy, so be aware of the local circumstances as you go about looking at properties.

Record-Low Borrowing Rates

Fortunately, the market today is doing a lot better than it was a few years ago. There were record-low borrowing rates in the previous years (caused by the unprecedented COVID-19 pandemic) that, coupled with the low supply, have driven the demand to where it is now. While some worry that it may crash within a few years, the prices are robustly growing in the current climate – and crashes are notoriously hard to predict, after all. 

Mortgages are getting more expensive by the year, so make sure you have the means necessary to buy. The housing market is rarely the same for very long. Economic shifts in the next few years may render the market quite different from the one today. 

But as long as the country has millions of millennials scrambling to buy a house, it will be struggling to supply them with properties.

Did you enjoy reading this article? Here’s more to read. How Owning a Home Builds Your Net Worth